The Reserve Bank of India has imposed a monetary penalty ₹ 1.00 lakh (Rupees One Lakh only) on the Pij People’s Co-operative Bank Ltd., Pij, Dist. Kheda (Gujarat), for violation pertaining to risk categorization of accounts and non-reporting of Cash Transaction Reports (CTRs) to Financial Intelligence Unit-India (FIU-IND), New Delhi.
Reserve Bank of India has advised banks to prepare a profile for each customer based on risk categorization. At the same time, RBI has reemphasized the need for periodical review of risk categorization.
As continuous monitoring cannot be done manually, an appropriate software application has to be in place to throw alerts when the transactions are inconsistent with risk categorization and updated profile of customers.